Building a board’s breadth of experience—to help arm directors for the vast array of potential challenges that reach the board level—is becoming a higher priority for boards today. Because it can be difficult to add quickly the skills and experience necessary to tackle rapidly emerging issues, boards often have to expand how they think about new board members. To build skills quickly, many boards are turning to candidates with experience as professional service partners (PSPs) – from accounting to consulting to law.
As current public company board members and former professional services partners, we are sometimes asked how our prior experience as client-serving partners enhances a board. We have observed four key ways where the right veteran professional services partner can bring great value to the boardroom:
1. Broad cross-sector/cross-functional experience. PSPs are “utility players” whose breadth and flexibility benefit boards; they often have cross-sector experience, and decades of working with diverse clients, many of which are global. They have worked with boards and C-Suite executives, and also spent many hours on plant floors, in manufacturing facilities, in oil fields, in hospitals, etc. Many PSPs also have cross-functional experience in areas for which boards have increased needs, such as the digital, marketing, legal, and regulatory arenas. Cross-industry experience is often transferable, and cross-functional experience often permits a broader contribution than that made by board members with narrower experience, however deep.
2. “Filling in the gaps” in a board skills matrix. As Equilar reports, more companies are disclosing in proxy statements their board skills matrices,which are valuable when a board can anticipate which skills it needs for the challenges that lie ahead. But it is hard to be prescient; the pace of change demands an unprecedented agility. PSPs who have been successful across industry sectors have spent decades mastering the art of learning agility, acquiring a wide range of skills that can check multiple boxes on a board skills matrix. Their breadth and agility present a unique value proposition, especially to boards whose companies are undergoing unprecedented, unpredictable, and rapid transformation.
3. Pros at talent. More than ever before, companies are fighting to attract, retain, and manage the talent they need to succeed – a core strength of PSPs. Talent management is what successful PSPs and professional services firms do, and have done well for decades. Successful PSPs often have valuable experience in talent acquisition, deployment, and retention.
4. Shorter learning curves. Spencer Stuart’s new Board Index reports that 33% of new independent directors in 2018 are first-time directors. One of the challenges for a first-time director is lack of board experience. Although most active PSPs are not allowed to serve on boards due to conflicts, many PSPs have experience participating in major boardroom discussions. That experience can shorten what otherwise might be a new director’s long learning curve. And because that experience comes from a variety of sectors, companies and situations, it also forms the basis of a broader contribution.
So how does a board find the right PSP to add to its board? Irrespective of whether the PSP comes from accounting, consulting, or law, valuable board skills are likely to reside in PSPs with the following hallmarks:
– Leadership experience: Although the professional services industry does not typically use the CEO title for its leaders, those who have headed or led complex, competitive professional services businesses have managed large P/Ls and have experience that is comparable to that of the CEO of a privately held business.
– Cross-industry and cross-functional expertise: As noted above, cross-industry and cross-functional are experience often transferable.
– Size of practice client relationships: PSPs who have built large, successful practices often did so because they became trusted business counselors/advisors to their clients.
– Geography: PSPs who have served global clients are often knowledgeable about running businesses in other geographic regions.
So, the next time you are adding skills to refresh your board, consider how the right PSP can enhance your board’s skills by bringing cross-sector and cross-functional experience, C-Suite experience, and agility with expertise to help guide the company.
The authors are members of WomenCorporateDirectors, the global organization of women board members.
Linda L. Addison is a member of the Board of Directors and Compensation Committee of Torchmark Corporation (NYSE: TMK). She is Immediate Past Managing Partner and former Chair of the Management Committee of Norton Rose Fulbright US LLP.
Ekta Singh-Bushell is a member of the Board of Directors of DSW (NYSE), NET 1 (NASDAQ, JSE), Datatec (JSE), and TTEC (NASDAQ). She previously served as COO, Executive Office, Federal Reserve Bank of New York and as Global Client Service Partner at EY.